Refer to the Diagram $X _ { n 2 }$ , the GDP in the Open Economy Will Exceed GDP

question 9

Multiple Choice

Refer to the diagram. If net exports are $X _ { n 2 }$ , the GDP in the open economy will exceed GDP in the closed economy by

• A) AB.
• B) AD.
• C) FG.
• D) BD.

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Definitions:

Price Ceiling

A legal maximum price set below the equilibrium price, preventing sellers from charging more than this amount.

Price Floor

A government-imposed minimum price set above the equilibrium price, preventing market prices from falling below a certain level.

Shortage

The occurrence of demand for a certain product or service outpacing the supply in the marketplace.

Surplus

The amount of an asset or resource that exceeds the portion that is actively utilized; in economic context, it often refers to excess production or budgetary surplus.